1. It is shocking that the current article in Foreign Affairs calls for saving the plunging economy by giving money directly to people for consumption. Shocking in that Foreign Affairs, the publication of the Council of Foreign Relations (CFR) appears to be advocating a radical populist plan of income redistribution. CFR is a think tank of the power elite. It’s also surprising that CFR, which focuses on foreign policy and international affairs, would be advocating a plan that is seemingly exclusively domestic.

2. It is predictable that the current article in Foreign Affairs calls for saving the plunging economy by giving money directly to people for consumption. Consumer spending represents upwards of two-thirds of the U.S. economy. People aren’t spending because they don’t have money — due to stagnant wages, rising prices and large debt. The power elite realizes the Federal Reserve’s Quantitative Easing (QE) program, which injected over $4 trillion into the economy which ended up in bank coffers and in the stock market, achieved little in real terms to generate real economic activity — which is based on demand. If people in the middle and bottom don’t demand stuff, producers won’t produce stuff. It’s also predictable because the power elite realize people are angry and may begin, as billionaire Nick Hanauer suggests, to wield pitchforks if they aren’t helped and the rising rich-poor gap isn’t closed. Move over, the Federal Reserve has run out of monetary tools to spur the economy — injecting money to bankers and lowering interest rates to zero hasn’t worked. Handing out money may also blunt increasing calls to abolish or nationalize the Fed.

3. The proposed plan contains a concept contained in the National Emergency Employment Defense (NEED) Act. This was the bill introduced in the two previous sessions of the U.S. House of Representatives which called for giving every single person in the US a certain fixed amount of money to help meet their needs. Most people, especially in the economic middle or bottom, would spend the money almost immediately, thereby, injected cash into the economy and creating an economic multiplier — with hopefully each dollar injected being exchanged multiple times. The concept is sound.

4. The specifics of the proposed plan are unsound. It appear the Foreign Affairs authors call for the US government to do further into debt to come up with the necessary initial cash, which would be invested in a bundle of diverse market investments that supposedly would earn 5% over 15 years. After that time, the proceeds would be distributed by the Federal Reserve, not the US Government, to the lowest earning 80% of the population into tax-exempt savings accounts with constrains on how the money could be spent (presumably spending on high speculative derivatives would not be on the list). What’s the plan between now and 15 years from now? Does the Fed in their right banking corporation-serving mind believe people can tread economic water for 15 years? Or will the mere fact that announcing that people are going to receive cash 15 years into the future enough to generate sufficient consumer confidence that people will go on a spending binge? Lastly, what exactly happens if and when the “diverse market investments” plummet anytime over the next 15 years? The markets are currently in extreme bubble territory. Will this plan only go into effect after a crash when the market resets 30% – 60% lower than today?

5. If economists (connected to the Fed or otherwise), policymakers and the public are serious about examining “outside the box” alternatives to (a) going into more debt, (b) robbing Peter to pay Paul spending shifts, or (c) significantly raising income taxes to generate funds to put into people’s hands, they should examine a fourth option: putting debt-free and inflation-free money into people’s hands by enacting legislation that would nationalize the private Federal Reserve system, end the practice of banks lending many times more than they actually possess (fractional reserve banking), and shifting the authority back from banking corporations to We the People in creating and distributing our own money, as called for in the US Constitution. US Money, similar to Greenbacks created by the Lincoln Administration, could be used to rebuild our nation’s crumbling infrastructure, provide funding for needed investments at the state level and provide every person a certain amount of funds. Limited democratically controlled money creation would shift our nations money from banking corporations to people. The Fed isn’t stupid. Their plan seeks to co-opt the populist idea of bottom-up money distribution. We need to promote the real thing.

We summarize last week’s activities; announce upcoming events for next week; and comment on the call to Gov. Kasich to extend statewide a work requirement waiver to receive federal food stamps; the need to hold hearings and the corporate connections related to the poisoning of Toledo’s water system; corporate “inversions,” perversions and conversions; and a Labor Day weekend labor quiz question…and answer.

“It has been said that all Government is an evil. It would be more proper to say that the necessity of any government is a misfortune. This necessity however exists; and the problem to be solved is, not what form of government is perfect, but which of the forms is least imperfect; and here the general question must be between a republican Government in which the majority rule the minority, and a government in which a lesser number or the least number rule the majority.

The result… is, that we must refer to the monitory reflection that no government of human device and human administration can be perfect; that that which is the least imperfect is therefore the best government; that the abuses of all other governments have led to the preference of republican government as the best of all governments, because the least imperfect; that the vital principle of republican government is the lex majoris parties, the will of the majority.”

— James Madison,

The trick, of course, is to find the right balance in government between direct and representative democracy in a manner where the will of the majority, in fact, prevails but where the basic inalienable rights (political, economic, social) of the minority are protected. Friends or Quakers believe in consensus decision-making, where the voice of every person is authentically heard: a worthy goal but impractical of a nation of hundreds of millions. The goal, however, should always be kept in mind as we constantly (re)adjust the terms for living together in society.

1632 – BIRTH OF JOHN LOCKE, ENGLISH PHILOSOPHER“Observe well these rules: It is a very common mistake to say that money is a commodity…Bullion is valued by its weight…money is valued by its stamp.”

1786 – BEGINNING OF SHAYS’ REBELLIONSparked in large part by personal debt, nonpayment of salaries, and collapse of the national currency, farmers in Massachusetts, led by Daniel Shays, attack a US Armory. The lack of a focused response to the uprisings led to calls to reforming the Articles of Confederation. The Philadelphia Convention, which followed, rather than reforming the Articles of Confederation, created a new more centralized Constitution. While less democratic in many ways (as it was drafted by and gave exclusive rights ony to white, male landowners), the new Constitution empowered the government to coin its own money, separate from banks and financial institutions.

2005 – DEATH OF JUDE THADDEUS WANNISKI, AMERICAN JOURNALIST AND POLITICAL ECONOMIST“There was a big party at Morgan Stanley after the Mexican peso devaluation, people from all over Wall Street came, they drank champagne and smoked cigars and congratulated themselves on how they pulled it off and they made a fortune.”

1959 – ROBERT B. ANDERSON, SECRETARY OF THE TREASURY UNDER PRESIDENT EISENHOWER “When a bank makes a loan it simply adds to the borrowers’ deposit account in the bank by the amount of the loan. The money is not taken from anyone else’s deposit; it was not previously paid in to the bank by anyone. It’s new money, created by the bank for the use of the borrower.”

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Why this calendar? Many people have questions about the root causes of our economic problems. Some questions involve money, banks and debt. How is money created? Why do banks control its quantity? How has the money system been used to liberate (not often) and oppress (most often) us? And how can the money system be “democratized” to rebuild our economy and society, create jobs and reduce debt? Our goal is to inform, intrigue and inspire through bite size weekly postings listing important events and quotes from prominent individuals (both past and present) on money, banking and how the money system can help people and the planet. We hope the sharing of bits of buried history will illuminate monetary and banking issues and empower you with others to create real economic and political justice. This calendar is a project of the Northeast Ohio American Friends Service Committee. Adele Looney, Phyllis Titus, Donna Schall, Leah Davis, Alice Francini, Deb Jose and Greg Coleridge helped in its development. Please forward this to others and encourage them to subscribe. To subscribe/unsubscribe or to comment on any entry, contact monetarycalendar@yahoo.com